ICE cotton futures fell on Tuesday in thin trade as investors booked profits, while the fibre registered its second consecutive yearly loss due to US-China trade tensions. Cotton contracts for March settled down 0.51 cent, or 0.73%, at 69.05 cents per lb.

The contract traded within a range of 68.80 to 69.72 cents a lb, having touched a near-seven-month high earlier in the day. Cotton marked its second straight annual decline, losing about 4.4% this year. The front-month contract rose 7.2% for the month.

Cotton has been up over the last couple of weeks, with some profit-taking before the holiday, said Jack Scoville, vice president at Chicago-based Price Futures Group. He noted that market volume was low due to New Year's Eve. US President Donald Trump said that Phase 1 of the US-China trade deal would be signed on Jan. 15 at the White House.

China is the biggest consumer of cotton and the United States is the biggest exporter. On the technical side, the contracts “should experience resistance near 69.50-70.00 cents and then 71.00-72.00 cents basis March over the near to medium-term," wrote Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group in a note.

“Relatively strong support likely resides near 65.00-65.50 cents."

Total futures market volume fell by 5,862 to 21,486 lots. Data showed total open interest gained 5,715 to 222,851 contracts in the previous session. Certificated cotton stocks deliverable as of Dec. 30 totalled 9,221 480-lb bales, down from 11,699 in the previous session.